Rates on 10-year fixed-rate private student loans inched down last week. If you’re interested in picking up a private student loan, you can still get a relatively low rate.
From March 3 to March 8, the average fixed interest rate on a 10-year private student loan was 7.18% for borrowers with a credit score of 720 or higher who prequalified on Credible.com’s student loan marketplace. On a five-year variable-rate loan, the average interest rate was 7.18% among the same population, according to Credible.com.
These rates are accurate as of March 3, 2025.
Related: Best Private Student Loans
Fixed-Rate Loans
Last week, the average fixed rate on 10-year loans dropped by 1.41% to 7.18%. The week prior, the average stood at 8.59%.
Borrowers currently in the market for a private student loan will receive a lower rate than they would have at this time last year. At this time last year, the average fixed rate on a 10-year loan was 8.90%, 1.72% higher than today’s rate.
If you were to finance $20,000 in student loans at today’s average fixed rate, you’d pay around $234 per month and approximately $8,089 in total interest over 10 years, according to Forbes Advisor’s student loan calculator.
Variable-Rate Loans
Last week, the average rate on five-year loans remained unchanged. It sits at 7.18%, the same as it was the week prior.
In contrast to fixed rates, variable interest rates fluctuate over the course of a loan term. Variable rates may start lower than fixed rates, especially during periods when rates are low overall, but they can rise over time.
Private lenders often offer borrowers the option to choose between fixed and variable interest rates. Fixed rates may be the safer bet for the average student, but if your income is stable and you plan to pay off your loan quickly, it could be beneficial to choose a variable loan.
Financing a $20,000 five-year private loan at 7.18% would yield a monthly payment of approximately $398. A borrower would pay $3,863 in total interest over the life of the loan. But the rate in this example is variable, and it could move up or down each month.
Related: How To Get A Private Student Loan
Know the Benefits of Private Student Loans
While private student loans shouldn’t necessarily be your first financial aid option, they can come with a variety of benefits, including the following:
- You can often borrow as much as you need.
Some private lenders let you borrow up to your school-certified cost of attendance minus any previously awarded financial aid. - You might not have to pay fees.
The best private lenders don’t charge origination or disbursement fees, so you won’t have extra charges on your loan in addition to interest. - Good credit means better interest rates.
While your credit score doesn’t matter with most types of federal student loans, it does impact private borrowing. Lenders often offer competitive rates to borrowers with excellent credit or a creditworthy co-signer. - It’s easy to apply online.
Applying for a private student loan is often a quick online process that you can do at any time throughout the school year. Many lenders also let you prequalify for loans online, making it easy to shop around and compare offers from multiple banks. - International students may be eligible.
Some lenders provide loans for international students attending school in the U.S. If you’re an international student, you may have to apply with a U.S.-based co-signer to qualify. - Your lender may offer useful perks.
Depending on the lender, you may qualify for some, from interest rate discounts to cash-back bonuses. Some offer a range of repayment terms, lengthy grace periods, forbearance and deferment options and other borrower protections.
Who Is Eligible for a Student Loan?
While eligibility requirements for a private student loan vary by lender, you’ll typically have to meet the following criteria:
- Good credit.
Unlike federal loans, private student loans have a credit requirement. Most private lenders look for good credit as reassurance that you can pay the loan back on time. - Proof of income.
Along similar lines, private lenders also want to see a source of income to ensure you’ll be able to pay back the funds. - Creditworthy co-signer.
Since most undergraduate students can’t meet a lender’s credit and income requirements alone, they must apply with a co-signer to qualify for a loan. - Eligible school.
A private lender also wants to see that you’re enrolled in an eligible school, usually at least half-time. The lender will reach out to your school to certify your official cost of attendance. - Age of majority in your state.
You’ll also need to be old enough to borrow a loan. The minimum age is typically 18. - U.S. citizen or qualifying non-citizen.
You’ll have to meet citizenship requirements to qualify for a loan. Some lenders offer loans to international students if they apply with a co-signer who’s a U.S. citizen or permanent resident. However, a few lenders provide loans for international students attending school in the U.S. without a co-signer.
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